UBS is seeing increasing interest from philanthropic and foundation capital in tapping a growing field of high impact, blended finance opportunities.
‘Philanthrocapitalism’ has emerged as a new term to describe how Chinese high-net-worth individuals and family offices are combining philanthropic and investment themes. From impact investing to injecting non-governmental organization (NGO) type roles into investment policies, private banks and financial advisors are discovering a growing need for a holistic approach that extends beyond product sales and meets multiple objectives.
Most investors seek impact investments with a clear focus on market-rate returns, but Mario Knoepfel, UBS’s head of sustainable investing advisory, said the bank is seeing increasing interest from philanthropic and foundation capital in tapping into a growing field of high impact, blended finance opportunities.
‘These investments are sourced through private banks but also through private networks and club investments,’ Knoepfel told Citywire Asia. In a recent UBS survey, 62% of family offices said impact investments will be a key focus and momentum appears to be strong, backed by a sense of purpose, with almost two thirds (62%) of families regarding sustainable investing as important for their legacy.
Institutions are therefore adapting their service and product channels to meet a demand for sustainable strategies that have now become mainstream.
For example, UBS’s clients have interests ranging from sustainability and impact alignment in public markets strategies to deeper impact private market opportunities all the way to social finance projects, Knoepfel added. ‘An important role we play for our clients therefore, is to identify credible, robust and attractive impact opportunities in the market for them through our strong global network and thorough due diligence,’ he said.
Within Greater China, UBS is seeing different angles and degrees of adaptation. Knoepfel said while ESG investments are rapidly gaining in popularity, ‘we observe differences when it comes to high impact, longer term approaches’. He is also seeing distinctions emerging between mainland and Hong Kong family offices due to the different economic drivers of wealth creation and social concern.
‘In mainland Chinese family offices, we tend to see strong interest among new economy entrepreneurs with healthcare and education being key areas of focus.
‘As a point of comparison, with Hong Kong based family offices, we also see somewhat higher willingness to invest into ecosystem changes, beyond individual company opportunities,’ he said.
External Asset Managers view on Philanthrocapitalism is alive and strong and Virobel Wealth Management AG do believe that more and more investors including Family Offices are leaning towards this.
Virobel Wealth Management AG has identified through research that Philanthrocapitalism.ch is an emerging trend taking place amongst Chinese family offices and other single family offices willing to invest for the greater good worldwide. Virobel Wealth Management seeks to work with those family offices seeking to identify and impactful opportunities in philanthrocapitalism.